to the point: financial regulation | 05/2025

·     The EBA has released the final technical package for version 4.1 of its reporting framework, which will take effect in the second half of 2025. This new framework significantly impacts financial institutions and crypto-asset service providers by introducing updated, standardised and more detailed reporting requirements designed to improve regulatory compliance, transparency and supervisory effectiveness. Specifically, the rules aim to support the assessment and identification of significant crypto-asset providers under MiCAR, while also enabling the centralisation of prudential disclosures through the EBA's Pillar 3 data hub. This central data hub will allow institutions, supervisors and other users to more easily access and analyse regulatory disclosures. Obliged entities will now need to report using a more advanced data structure based on the transition to Data Point Model (DPM) 2.0, which involves adopting a new data dictionary format, applying a comprehensive set of validation rules and utilising the XBRL taxonomy for submissions. These changes will also require reporting of data relevant to ESG factors and instant payments. The new obligations mean that institutions must ensure their systems and internal processes are aligned with the latest DPM and XBRL standards and can meet the EBA's expanded validation and disclosure expectations.

·       The EBA has published its new onboarding plan for the Pillar 3 data hub, setting out concrete steps that obliged institutions – particularly large and other regulated entities under the Capital Requirements Regulation (CRR3) – must follow to begin submitting their prudential disclosures to a centralised EU platform. These new rules mean that institutions are now responsible for preparing to transition from decentralised or institution-specific disclosure practices to a unified system managed via the EBA's EUCLID Regulatory Reporting Platform. Although 2025 will serve as a transitional period allowing institutions to continue meeting their Pillar 3 obligations as usual, they must begin aligning internal processes, systems and data formats to meet the future centralised submission requirements. The phased-in approach is designed to provide adequate preparation time, but ultimately requires obliged entities to adapt to more structured, comparable and transparent disclosure practices. Institutions must therefore invest in understanding and executing the onboarding steps now to ensure full compliance when submissions to the Pillar 3 data hub become mandatory, with public access to the disclosed data starting from December 2025.

·      The EBA has repealed Guidelines on the specification of high-risk exposures and clarified that institutions are no longer required to identify or classify exposures under the previously defined "high-risk" category, as this classification has been removed under the new Capital Requirements Regulation (CRR3). For banks, this change reduces regulatory complexity by eliminating the need to apply and interpret the now-obsolete 2019 guidelines. Instead, they must now focus solely on the requirements related to "subordinated debt exposures" as specified in the updated Article 128 of the CRR3. This streamlining aims to provide legal clarity and ensure institutions align their risk classification and capital planning strictly with the revised regulatory framework.

·      The EBA has updated technical standards on resolution planning reporting (see Final report on draft ITS on Resolution Planning reporting), introducing streamlined, harmonised and more proportionate requirements for obliged persons and entities, particularly banks and other financial institutions subject to resolution planning obligations. Under the new rules, institutions will face reduced compliance burdens thanks to the elimination of redundant data points, avoidance of overlapping data requests across frameworks (such as MREL/TLAC, CoRep, and FinRep) and the introduction of a modular "core-plus-supplement" approach. This means that reporting obligations will now be tailored to the size and complexity of each institution, with smaller or less complex entities required to submit less extensive information. Additionally, the new ITS relieve entities from parallel data collection exercises by different authorities, offering a more coherent and user-friendly reporting process. For obliged entities, this represents a significant simplification and cost saving in the resolution planning reporting process, while still ensuring that resolution authorities receive high-quality, relevant data to prepare effective resolution plans. Under the Bank Recovery and Resolution Directive (BRRD), resolution authorities are obligated to develop resolution plans that detail the steps to be taken if an institution is deemed to be failing or likely to fail. ITS on procedures, standard forms and templates define the process that institutions must follow when providing information needed by resolution authorities to create these plans.

·     The Government of the Czech Republic is currently preparing and discussing the following laws, amendments to laws and decrees:

• Draft Act amending Act No. 240/2013 Coll., on investment companies and investment funds – transposes Directive (EU) 2024/927;
• Draft Act amending Act No. 256/2004 Coll., on Capital Market Business – transposes Directive (EU) 2024/790;
• Draft Act amending certain capital market laws in connection with the establishment and operation of the Single European Access Point;
• Draft decree reducing the regulatory burden on the financial market – removing regulatory requirements in the financial market in areas of EU harmonised regulation that go beyond EU law.

·      In light of the amendments to Act No. 37/2021 Coll., on the Register of Beneficial Owners (available here in Czech), effective from 2022, and based on new practical developments in identifying beneficial owners, the Financial Analytical Office (FAO) has updated Methodological Instruction No. 3 – Determination of the Beneficial Owner (Czech version only). This instruction is intended for all obliged entities under the Czech AML Act (available here in Czech) and has been reviewed by the Czech National Bank and the Ministry of Justice.

·      The draft provides for several key changes in the banking sector, centered around expanded supervision of large banking institutions and strengthening safety measures in the Polish banking & finance landscape. Most notable changes are KNF (Polish Financial Supervision Authority) approval for executive appointments; greater authorizations for the KNF in structured transactions; new requirements for non-EU banks; increasing the independence and transparency of supervision; and concentration risk management - implementation of Directive 2024/2994.